Public auction sale finality: confirmation vests title, and later registration of the sale certificate does not trigger the insolvency moratorium.

In a public auction sale under the SARFAESI regime, once the bid is accepted and the sale is confirmed by the authorised officer, the sale becomes absolute and title vests in the purchaser; the sale certificate is only evidence of that title and its later registration does not complete the sale. Applying that principle, the Tribunal found the auction, confirmation, and issuance of the sale certificate had all occurred before commencement of CIRP, so the subsequent registration did not attract the moratorium under the Insolvency and Bankruptcy Code. The completed auction sale was therefore not liable to be annulled.

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Issues: Whether the secured asset, sold by public auction under the SARFAESI regime and confirmed before commencement of CIRP, could be annulled on the ground that the sale certificate was registered after initiation of CIRP and therefore violated the moratorium under the Insolvency and Bankruptcy Code, 2016.

Analysis: The decisive question was whether the sale attained finality on confirmation of the auction or only on registration of the sale certificate. The order applies the settled principle that in a public auction sale, once the bid is accepted and the sale is confirmed by the authorised officer, the sale becomes absolute and title vests in the purchaser. The sale certificate is treated only as evidence of that title and registration is regarded as a formality for stamp duty and registration purposes, not as the event that completes the sale. On the admitted facts, the auction was conducted, the sale was confirmed, and the sale certificate was issued before commencement of CIRP. The later registration of the certificate did not revive any right in the corporate debtor or attract the moratorium. The order also notes that transactions under Section 52 of the Transfer of Property Act are not void ab initio, and finds no basis to treat the completed auction sale as invalid.

Conclusion: The auction sale was held to have been completed before CIRP commenced, so the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 was not violated and the request to cancel the sale failed.

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